VMware (NYSE:VMW) reported encouraging Q4 and 2012 earnings yesterday, but tempered this by announcing job cuts.
The quarterly tally was $1.3 billion in revenue and a net profit of $206 million ($0.47 per diluted share), which was above analyst expectations. Those figures were roughly 22% and 3% higher, respectively, on a year-over-year basis.
Those percentage figures matched the full-year numbers, with revenue advancing to $4.6 billion and the bottom line coming in at $746 million ($1.72 diluted EPS).
However, the company expects lower revenue growth this year. It anticipates the top line will be $5.23 billion-$5.35 billion for 2013, which is several tens of millions shy of previous analyst expectations.
In an SEC filing, the company announced job cuts that will affect around 900 employees, which would be about 6.8% of the company's total work force. VMware expects to take a charge of $70 million-$80 million for the layoffs and said the exit of certain lines of business and the consolidation of facilities would result in another charge of $20 million-$30 million. The company said it expects the "streamlining" plan that includes the layoffs and consolidation to be done by the end of 2013.
According to The Wall Street Journal, the cuts will come in units that develop the company's slower-growing products and overall the company plans to boost its head count by around 1,000 during the course of this year.
Fool contributor Eric Volkman has no position in VMware. The Motley Fool recommends VMware. The Motley Fool owns shares of VMware. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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